City Bank Limited: A Leading Bangladeshi Private Commercial Bank

Overview

City Bank PLC is a private commercial bank in Bangladesh and one of the oldest private-sector banks in the country. Incorporated on 14 March 1983, it began operations on 27 March 1983, in the first wave of private banks licensed after the government opened the sector to private ownership. The bank is headquartered at City Bank Center on Gulshan Avenue in Dhaka and is listed on both the Dhaka Stock Exchange and the Chittagong Stock Exchange.

City Bank is best known nationally for two things: its cards business — it has been the sole issuer and acquirer of American Express cards in Bangladesh since 2009 — and its digital platform Citytouch, launched in 2013. After a period in the mid-2000s when it was classed as a problem bank, a long transformation programme rebuilt it into one of the country's more profitable and better-capitalised private lenders. In 2025 it reported a record consolidated net profit of Tk 1,324 crore, deposits of Tk 63,170 crore and a non-performing loan ratio of 2.5 percent, at a time when more than a third of all loans in the Bangladeshi banking system were officially classified as defaulted.

History

City Bank was set up in 1983 by a group of local entrepreneurs — most accounts put the number of founding sponsors at 12, while the bank's own history says around 13 — with paid-up capital of just Tk 3.4 crore. Its first branch opened on Bangabandhu Avenue in Dhaka on 27 March 1983. Among the founding sponsor directors was Anwar Hossain, founder of the Anwar Group, who went on to chair the bank four times.

The bank's first two decades were difficult. Lending was decentralised and branch-led, bad loans accumulated, and by 2006–07 deposit growth had stalled and City Bank had slipped into the problem-bank category; Bangladesh Bank even appointed two observers to its board. The turnaround began in 2007 under chairman Aziz Al Kaiser, himself a founding director. The bank centralised its operations, stopped branch-based lending and letter-of-credit opening, and recruited a team of bankers with international-bank experience — the first chief executive of the new era was Kazi Mahmood Sattar, followed by Sohail RK Hussain and, from 2019, Mashrur Arefin. Retail banking, credit cards and SME lending were built up as new business lines.

In July 2008, marking its 25th anniversary, the bank adopted a new logo and the shortened brand name "City Bank". It had already been the first bank in Bangladesh to issue a dual-currency credit card. In November 2009 it launched American Express and American Express Gold credit cards under the full territorial licence for the Amex business in Bangladesh. A brokerage division followed in 2009, separated into a subsidiary in 2010. In 2017 the International Finance Corporation (IFC), the World Bank Group's private-sector arm, completed the purchase of a 5 percent stake agreed the previous year, becoming one of the bank's largest single shareholders. In the early 2020s, following an amendment to the Companies Act that required public limited companies to use the PLC suffix, the bank changed its legal name from The City Bank Limited to City Bank PLC.

Ownership and Leadership

City Bank is a publicly listed company. As of mid-2026 its sponsor-directors held about 30 percent of the shares, with the remainder in free float among institutional, foreign and general public investors; paid-up capital stood at Tk 1,749 crore. The IFC holds a 5 percent stake dating from 2017 and is represented on the board by a nominated director, Rebecca Brosnan.

The chairman is Hossain Khaled, elected by the board on 27 July 2025. A sponsor director and group managing director of the Anwar Group of Industries, Khaled had served as the bank's vice chairman for seven years and is the son of founding sponsor Anwar Hossain. He succeeded Aziz Al Kaiser, who had chaired the bank from 2007 through its transformation and remains on the board as a director. Rubel Aziz serves as vice chairman.

The managing director and chief executive officer is Mashrur Arefin, who took office in January 2019 and was reappointed in January 2025 for a further three-year term with the approval of Bangladesh Bank. Arefin joined the bank in 2007 as head of retail banking and was part of the team that led the post-2007 transformation.

The bank has five subsidiaries: City Brokerage Limited (stock brokerage), City Bank Capital Resources Limited (merchant banking and portfolio management), CBL Money Transfer Sdn. Bhd. (a Malaysian money-services company for remitters), City Hong Kong Limited (trade finance, established in 2019) and City Credit Bureau PLC, incorporated in November 2025 as part of Bangladesh Bank's initiative to license private credit bureaus.

Products and Services

City Bank serves corporate, commercial, SME and retail customers. Its trade services are a particular strength: the bank handled trade business of US$8.01 billion in 2025, which it reported as the highest volume among local banks. It runs an offshore banking unit for foreign-currency business and is a significant channel for remittances sent home by Bangladeshi workers abroad, supported by its Malaysian subsidiary and exchange-house tie-ups.

The cards business is the bank's most visible franchise. City Bank is the sole issuer and merchant acquirer of American Express cards in Bangladesh, a role American Express itself dates from 2009; its Amex range runs from the Blue and Gold cards to the Platinum Card and co-branded products such as the University of Dhaka American Express Card, and in September 2026 it added a new premium product, the City Bank American Express Ultramarine Credit Card. The bank also issues and acquires Visa and Mastercard products, and was the first bank in the country to issue a dual-currency credit card.

Retail propositions include Citygem priority banking and City Alo, a dedicated banking service for women. Shariah-compliant banking is offered under the City Manarah brand through one Islamic banking branch and 60 Islamic banking windows (as of October 2025). City Bank was also among the pioneers of bancassurance in Bangladesh, selling insurance products through its branches, and provides SME and small-business finance, supply-chain finance and agent-banking-based microloans.

Branch Network and Outreach

As of July 2026, City Bank operated 135 branches and 81 sub-branches across Bangladesh, supported by several hundred ATMs and cash deposit machines — 453 at the end of 2024 — and employed more than 6,000 people. Its head office, City Bank Center, stands at 28 Gulshan Avenue in Dhaka's Gulshan-1 district.

Beyond the branch network, the bank has used agent banking, launched in 2017, to reach rural and underserved areas; it had over 430 agent outlets as of June 2025. Unusually, its lending through agents has run well ahead of the deposits it collects through them, giving it the second-largest share of agent-banking loans in the country, with a focus on small traders, farmers and women entrepreneurs. Its remittance footprint extends abroad through CBL Money Transfer in Malaysia and City Hong Kong Limited.

Financial Performance

City Bank's strongest results to date came in 2025. Consolidated net profit after tax rose 31 percent to a record Tk 1,324 crore, from Tk 1,014 crore in 2024; the bank on its own earned Tk 1,306 crore. Operating profit grew 16 percent to Tk 2,727 crore, and consolidated earnings per share increased to Tk 8.71 from Tk 6.67. Interest income from loans rose 24 percent to Tk 5,452 crore, while total operating income reached Tk 4,888 crore and the cost-to-income ratio was held at 44 percent despite inflation.

The balance sheet expanded quickly: deposits grew 23 percent to Tk 63,170 crore by the end of 2025, and loans and advances grew 13.6 percent to Tk 50,616 crore. Asset quality improved on the bank's reported figures — the non-performing loan ratio fell to 2.5 percent at the end of 2025 from 3.7 percent a year earlier, with classified loans of Tk 1,267 crore. Provision expense was raised to Tk 815 crore, lifting the provision coverage ratio to 128 percent; the managing director noted that this heavier provisioning kept profit below the Tk 1,500 crore mark he had targeted. Capital remained comfortably above regulatory requirements, with a capital-to-risk-weighted-assets ratio of 15.74 percent on a solo basis at the end of 2025, against a minimum of 12.5 percent including the capital conservation buffer. A dividend of 30 percent for 2025 — 15 percent cash and 15 percent stock — was approved at the bank's 43rd annual general meeting in June 2026.

Growth continued into 2026, though at a slower pace: in the first half of the year deposits grew 15.6 percent against lending growth of 8.4 percent, profit after tax was about Tk 527 crore, and the bank raised Tk 1,200 crore of Tier-II subordinated bonds to support its capital base. Consolidated earnings per share for the first nine months of 2026 were Tk 4.96, up from Tk 4.13 in the same period of 2025.

Digital Banking

Digital banking is central to City Bank's model. Citytouch, launched in October 2013, is described by the bank as Bangladesh's first mobile banking application; by mid-2025 it had about 8.82 lakh users and was handling transactions worth roughly Tk 400 crore a day across more than 100 services, from fund transfers and bill payments to deposit account opening and card management. In October 2020 the bank launched the Ekhoni Account app, which lets customers open an account instantly using electronic KYC verification without visiting a branch.

City Bank also pioneered, together with bKash, the country's first app-based digital nano loan, using data-driven credit scoring to lend small amounts to mobile wallet users. Corporate customers are served through the Citylive platform, small businesses use digital invoicing and supply-chain finance tools, and remitters in Malaysia use the CityRemit app of the bank's Malaysian subsidiary.

Challenges and Controversies

City Bank operates in a banking system under severe strain. After Bangladesh Bank tightened loan-classification rules in 2024–25, officially recognised defaulted loans across the industry reached 35.73 percent of all loans in September 2025 — a figure still at 32.78 percent in June 2026 — and policy interest rates stayed at a peak of 10 percent until a cut to 9.5 percent in July 2026. Against that backdrop, the bank's own reported asset quality has held up comparatively well, but its results carry visible pressure points: provisioning charges absorbed a large share of operating profit in 2025, and about 26 percent of its operating income that year came from investments in government securities rather than from lending, tying earnings to treasury yields at a time of weak private-sector credit demand.

A regulatory change in 2026 created a more specific problem. A Bangladesh Bank circular of 23 May 2026 bars banks with paid-up capital below Tk 2,000 crore from paying cash dividends from the end of 2026; City Bank's paid-up capital of about Tk 1,749 crore leaves it short of the threshold, and in August 2026 the bank proposed raising its authorised capital from Tk 2,000 crore to Tk 3,000 crore, putting the plan to shareholders at an extraordinary general meeting on 4 October 2026.

The bank has also faced regulatory sanction. In February 2026 the Bangladesh Securities and Exchange Commission fined City Bank Tk 1 lakh over manipulation of the shares of Agni Systems, a listed technology company, traded between June and November 2024; the bank's portfolio manager at the time was fined Tk 1.51 crore. City Bank told the regulator that the trades were the manager's undisclosed personal dealings and those of his relatives, that the bank itself had booked a capital loss of Tk 1.55 crore on the shares, and that it removed him from his position once the enquiry began.

Corporate Social Responsibility

City Bank's community and sustainability work is organised mainly around sustainable finance and financial inclusion. In March 2026 it signed the UN Principles for Responsible Banking and joined the United Nations Environment Programme Finance Initiative, committing itself to aligning its lending with sustainable development goals. It has also published a climate report containing disclosures under the IFRS S1 and S2 sustainability standards, among the first Bangladeshi banks to report on that basis, and its agent-banking programme is run with an explicit inclusion mandate for rural customers, farmers and women entrepreneurs. The bank's standing in the sector was recognised when it was named Financial Institution of the Year at the 23rd Bangladesh Business Awards in 2025.

Outlook and Conclusion

City Bank enters the late 2020s in a stronger position than most Bangladeshi private banks: a low reported bad-loan ratio by local standards, capital above regulatory minima, a distinctive cards franchise and a large digital customer base. Its immediate agenda is set by regulation and by the economy — closing the paid-up capital gap that conditions its ability to pay cash dividends, bringing its new credit bureau subsidiary into operation (operations were expected to begin in September 2026 under Bangladesh Bank's letter of intent), and shifting earnings back toward lending as interest rates ease from their peak.

The risks are equally clear. The wider banking system's bad-loan burden remains unresolved, private-sector credit demand is weak, and a meaningful share of the bank's profits currently depends on government-securities income that will shrink as yields fall. Whether City Bank can convert its post-2007 reinvention into durable, lending-led growth — without repeating the asset-quality failures that once made it a problem bank — will decide whether its recent record profits mark a lasting change or a high point in a difficult cycle.